Northbrook Corporation issued $60,000 bonds payable to acquire machinery. The journal entry to record the transaction is:
A) Machinery 60,000 Cash 60,000
B) Machinery 60,000 Bonds Payable 60,000
C) Bonds Payable 60,000 Machinery 60,000
D) Cash 60,000 Bonds Payable 60,000
B
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Which of the following assumptions outlined by Modigliani and Miller (MM) theory is realistic??
A. ?Brokerage costs do not exist. B. ?Personal income taxes do not exist. C. ?Bankruptcy does not exist. D. ?The value of a firm will be maximized by financing almost entirely with debt. E. ?Interest on capital debt is tax deductibile.
Shareholders are LESS capable of diversifying currency risk than is the management of the firm
Indicate whether the statement is true or false.
Which of the following would not be classified as a knowledge work system?
A) Computer-aided design B) 3D visualization system C) Investment workstations D) Virtual reality system E) Digital asset management system
Wonderland, Inc. inadvertently recorded an expense as a capital expenditure. Which of the following will occur as a result of this mistake?
A) Assets will be understated. B) Net income will be understated. C) Net income will be overstated. D) Both A and C will occur.